Bryant v. Kelly

Annotate this Case

181 S.E.2d 438 (1971)

279 N.C. 123

Mary Alice BRYANT v. Hayward KELLY, Jr., et al.

No. 88.

Supreme Court of North Carolina.

June 10, 1971.

*441 Brock & Gerrans by Donald P. Brock, Trenton, for plaintiff-appellant.

Beaman & Kellum by Norman B. Kellum, Jr. and Trawick H. Stubbs, Jr., New Bern, for defendant-appellees.

HUSKINS, Justice:

The Court of Appeals correctly treated defendants' motion for a directed verdict as a motion for involuntary dismissal. Directed verdicts are appropriate only in jury cases. See Rule 50(a).

The trial judge concluded as a matter of law that Leonard Nixon Simmons did not hold the subject lands in trust for the plaintiff. This conclusion apparently rests on the "finding of fact" that there was no agreement "between plaintiff and Leonard Nixon Simmons on the subject lands binding on Leonard Nixon Simmons unless and until plaintiff paid the sum of $250."

We first dispose of all questions relating to purchase money resulting trusts. "It is elemental that a resulting trust arises, if at all, in the same transaction in which the legal title passes, and by virtue of consideration advanced before or at the time the legal title passes, and not from consideration thereafter paid." Rhodes v. Raxter, 242 N.C. 206, 87 S.E.2d 265 (1955). It is clear from the evidence here, and it was so found by the trial judge, that the consideration passed more than a year after the transaction in which the legal title was transferred. Therefore, no resulting trust could arise.

We turn to the law of parol trusts. North Carolina is one of a minority of states that has never adopted the Seventh Section of the English Statute of Frauds which requires all trusts in land to be manifested in writing. 29 Charles II, c. 3, § 7 (1676); Carlisle v. Carlisle, 225 N.C. 462, 35 S.E.2d 418 (1945); Lord and Van Hecke, Parol Trusts in North Carolina, 8 N.C.L.Rev. 152 (1930); Bogert, Trusts and Trustees (2d Ed., 1965), § 64. Even so, this Court has consistently enforced safeguards that considerably limit the application of the parol trust doctrine. Lord and Van Hecke, supra; Pittman v. Pittman, 107 N.C. 159, 12 S.E. 61 (1890); *442 Paul v. Neece, 244 N.C. 565, 94 S.E.2d 596 (1956). Despite such limitations, this Court has always upheld parol trusts in land in the "A to B to hold in trust for C" situation. The rule is stated in Paul v. Neece, supra, in these words: "[I]t is uniformly held to be the law in this State that where one person buys land under a parol agreement to do so and to hold it for another until he repays the purchase money, the purchaser becomes a trustee for the party for whom he purchased the land, and equity will enforce such an agreement." See also Beasley v. Wilson, 267 N.C. 95, 147 S.E.2d 577 (1966); Martin v. Underhill, 265 N.C. 669, 144 S.E.2d 872 (1965); Roberson v. Pruden, 242 N.C. 632, 89 S.E.2d 250 (1955); Hare v. Weil, 213 N.C. 484, 196 S.E. 869 (1938); Owens v. Williams, 130 N.C. 165, 41 S.E. 93 (1902); 54 Am.Jur., Trusts, §§ 47, 48; 89 C.J.S. Trusts §§ 32(b), 34; Bogert, supra, § 64; 1 Scott on Trusts (3d Ed., 1967), § 40.1. Moreover, a parol trust "does not require a consideration to support it. If the declaration is made when or before the legal estate passes, it will be valid even if in favor of a mere volunteer." Hare v. Weil, supra; Paul v. Neece, supra. Evidence of the establishment of a parol trust is required to be clear, cogent, and convincing; a mere preponderance of the evidence is not sufficient. Paul v. Neece, supra; Pittman v. Pittman, supra.

Applying the foregoing legal principles, if there was clear, cogent, and convincing evidence of an agreement between the plaintiff and Leonard Nixon Simmons that the land in question would be repurchased from Craven County for the benefit of both of them, and if that agreement was made before Simmons took title to the land, then a valid parol trust arose, regardless of when the consideration was paid. The trial judge, sitting as judge and jury, did not find as a fact that there was or was not such a prior agreement or declaration. Instead, he found: "There was no agreement between plaintiff and Leonard Nixon Simmons on the subject lands binding on Leonard Nixon Simmons unless and until plaintiff paid the sum of $250.00." (Emphasis added) This finding is not a finding of fact but a conclusion of law, and as a conclusion of law it is erroneous. A parol trust becomes effective and binding at the time of the declaration and not at the time of the payment of the consideration. Paul v. Neece, supra.

Since the conclusion of the trial judge was grounded upon inadequate findings of fact and upon the erroneous legal notion that the agreement between the parties, if any, was not binding unless and until a consideration was paid, the decision of the Court of Appeals must be reversed and the case remanded for a new trial at which findings may be made as to whether such an agreement existed. Judgment may then be rendered thereon according to law.

For the sake of brevity, we refrain from a detailed discussion of other assignments relating to exclusion of certain evidence plaintiff sought to elicit from Earl Bryant, Charity Simmons and Madeline Banks. Many of these exceptions are well taken. Admissibility of such evidence is governed by G.S. 8-51 as interpreted in Peek v. Shook, 233 N.C. 259, 63 S.E.2d 542 (1951), and discussed in Stansbury, North Carolina Evidence (2d Ed., 1963), §§ 66-70, 73.

This action was commenced initially in the Superior Court of Craven County on 9 October 1968. The District Court Division of the General Court of Justice was established in the Third Judicial District on 2 December 1968. G.S. 7A-131(2). The Resident Judge of the Third Judicial District, on his own motion, transferred the cause to the district court for trial by order dated 2 December 1968. Plaintiff has filed written motion in this Court to remand the case to the Superior Court of Craven County for trial. Her motion is supported by affidavits that the lands in controversy are worth $10,000 to $15,000. Plaintiff asserts that the cause was transferred to the district court for trial on the *443 mistaken belief that the value did not exceed $5,000.

G.S. 7A-259(b) provides that when a district court is established in a district, "any superior court judge authorized to hear and determine motions to transfer may, on his own motion, subject to the requirements of subsection (a), transfer to the district court cases pending in the superior court." Subsection (a) of that statute provides in pertinent part: "Transfer is not made on the judge's own motion unless the pleadings clearly show that the case is pending in an improper division." The pleadings in this case do not reflect the value of the land and do not otherwise show the amount in controversy. The Superior Court Division of the General Court of Justice is the proper division for the trial of all civil cases in which the amount in controversy exceeds $5,000. G.S. 7A-243.

Orders transferring or refusing to transfer from one trial division of the General Court of Justice to another are not immediately appealable, even for abuse of discretion. "Such orders are reviewable only by the appellate division on appeal from a final judgment. If on review, such an order is found erroneous, reversal or remand is not granted unless prejudice is shown. If, on review, a new trial or partial new trial is ordered for other reasons, the appellate division may specify the proper division for new trial and order a transfer thereto." G.S. 7A-260. In our view, the superior court is the proper division for the trial of this case. It was improvidently transferred to the district court. Since a new trial is ordered for other reasons, it is ordered that the case be transferred to the Superior Court of Craven County for the retrial.

For the reasons set out, the decision of the Court of Appeals is reversed and the case remanded to that court for appropriate entries in accord with this opinion.

Reversed and remanded.